Margolies lashes back over pay from her nonprofit

Marjorie Margolies has set her sights on returning to Congress. She is getting help in fund-raising from her longtime ally and in-law former President Bill Clinton, but the connection to him could cut both ways. (ALEJANDRO A. ALVAREZ / Staff Photographer)

By Jessica Parks, Inquirer Staff Writer

Posted: April 06, 2014

After months of speculation, Marjorie Margolies is preparing for an event she hopes will seal her political comeback - a fund-raiser in which former President Bill Clinton will sing her praises and urge voters to return her to Congress.

At the same time, she's enduring the scrutiny that comes with being a front-runner - and the mother-in-law of Chelsea Clinton.

Margolies' campaign this week said it was contemplating a defamation suit against the Huffington Post for reporting that she "turned to her own charity in time of need" and "paid herself handsomely."

Among other things, Margolies and the nonprofit disputed the claims that she set her own salary. A senior campaign adviser called the articles "political hit jobs."

A review of tax filings for the charity, Women's Campaign International, and interviews with nonprofit experts indicate Margolies' pay was not unusual compared with pay at similar charities.

But for her campaign - in which she hopes to regain the seat representing Philadelphia and Montgomery County being vacated by Allyson Schwartz - the damage may have been done, said Chris Borick, a political science professor at Muhlenberg College in Allentown.

"No candidate running for office wants to be seen as taking advantage to benefit themselves," he said. "The way it's framed here does exactly that."

Things have changed since Margolies, 71, was last in the House. Redistricting shifted the 13th District from Republican to Democratic, and the boundaries now lie half in Montgomery County and half in Northeast Philadelphia.

Her campaign touts the 1993 vote that cost Margolies her seat - she cast the final "yes" to pass Clinton's landmark economic package with tax hikes - as proof she has the courage to get things done in Washington. In 2010, her ties to the Clintons became even stronger when her son, Marc Mezvinsky, married their daughter.

That helped Margolies retain a level of name recognition rare for a politician long out of office. An August 2013 poll found 62 percent of likely primary voters recognized her, and 55 percent favorably.

Through December, Margolies was running third in fund-raising. That's likely to change Thursday, when supporters will pay $1,000 or more each for lunch with the former president at the Warwick Hotel in Center City.

But the attention paid to Margolies' paychecks in recent weeks may show the Clinton connection can cut both ways. The Huffington Post's report has been picked up by the New York Post, the London Daily Mail, and the National Enquirer, with headlines referring to Chelsea Clinton's mother-in-law.

The news outlet's Washington bureau chief, Ryan Grim, said Friday he would let the reporting speak for itself.

Margolies cofounded Women's Campaign International in 1998. She has served as its president and as a board member.

Women's Campaign brings in about $1.4 million a year, mainly through government grants, to promote female leadership around the world, according to IRS filings. The group has done training and advocacy work in Liberia, Colombia, Afghanistan, Ethiopia, Uganda, and Sudan and has run a youth program in Philadelphia.

For the first decade, Margolies' annual compensation was under $60,000, tax filings show. In 2008, the group's revenue doubled, to more than $2 million, and Margolies' compensation jumped to $107,000.

It was a huge raise - 78 percent - but it only brought Margolies in line with her peers. According to Charity Navigator's annual compensation report, the median salary for executives of Women's Campaign's size in the Mid-Atlantic region in 2008 was $105,530. In 2011, Margolies' salary spiked at $164,200 before dropping to $109,600 in 2012, the last year she took pay.

The Huffington Post called her 2011 pay "unusually large," comparing it to a national median salary of $94,924 for nonprofits of less than $2.5 million.

Nonprofit experts say the size of an organization is only one variable to consider when evaluating pay. For other nonprofits in the Philadelphia area of the same size and in the same international/foreign affairs sector, the 2011 median salary was $158,300, according to the nonprofit watchdog GuideStar.

In an interview Thursday, Margolies said she did not vote on her compensation. Her 2011 salary was higher than in other years because the organization had just received a new grant, she said. "It was the largest grant we had ever gotten," Margolies said. "It was going to be a huge responsibility to WCI and to me."

Nancy Wallace, Women's Campaign's executive director, said Margolies' salary also was inflated by deferred payment from the previous year. "In 2010, all of the senior staff took voluntary pay deferrals in the face of declines in fund-raising," Wallace said in an e-mail.

Though Margolies' salary appears to be normal, several experts said it was unusual for an organization as small as Women's Campaign to have two highly paid executives. It had four executive directors from 2008 to 2012, earning an average of $81,600 a year.

Margolies said some of the organization's grants required having dual leadership positions. Wallace said the two handle different tasks, with Margolies "often in the field training and working with women, advancing government relations, and fund-raising," while the executive director "is responsible for program design, proposal development, and day-to-day administrative tasks."

The Inquirer reviewed four other nonprofits that deal with international women's affairs - three in Washington and one in Maryland. All had at least two high-paid officers and were comparable to Women's Campaign in salary, benefits, and program expenses.

"That may be the model with this particular nonprofit niche," said Linda Lampkin, research director at the ERI Economic Research Institute. With nonprofits, she said, "it's typically hard to generalize about them because they all operate differently."